Labour leadership hopeful Anas Sarwar yesterday tried to defuse the row over his family business by giving up his shares in the company.

The announcement comes after the most bruising week of his political life, in which he has faced criticism over sending his children to private school and the revelations that his family firm are not unionised and don’t pay the real living wage.

Sarwar was frontrunner to replace Kezia Dugdale after her shock resignation last month but rival Richard Leonard is now the bookies’ favourite to win.

Sarwar has shares worth an estimated £4.8million in United Wholesale Scotland, founded by his father, former Labour MP Mohammad Sarwar.

Ex-Labour MP Mohammad Sarwar (Image: Daily Record)

The Glasgow MSP insists he has no active role in business decisions. On Wednesday, he said in a radio interview that he does not take a dividend from his shares.

He was later forced to admit he had received about £20,000 a year in dividends until becoming an MSP last year.

Sarwar has also been criticised for saying the firm did not pay everyone the real living wage – a key Labour pledge – because it was voluntary.

Sarwar announced yesterday that his shares will now be put in a trust for his three young children, which they will be able to access as adults.

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He said: “This contest is about our party’s future and our country’s future. Politicised attacks from Nicola Sturgeon and others who want to destroy the Labour Party will never stop me fighting to return us to power.

“I will always put the Labour Party and my country first.

“I am in the Labour Party because of my values and members deserve to hear the radical policy ideas I am putting forward for the next Scottish Labour government.”

He added: “I will never apologise for being my father’s son. I am incredibly proud of his achievements, building a company from scratch that now employs around 250 workers – many in Nicola Sturgeon’s constituency.”

Sarwar said he had taken the decision on the shares to “demonstrate his commitment to public service”.

Anas Sarwar, left, is battling with Richard Leonard to lead Scottish Labour

But one Labour insider said: “It’s baffling that Anas didn’t do this long before now. The issue of his wealth and family business have completely overshadowed anything else he has had to say in the leadership race.

“The past week has been the worst of his political life and he may hope this puts a line under it. But the damage has been done and he may struggle to recover.”

On Thursday, Sarwar even appeared to be the victim of “dirty tricks” by politicians in his own party.

His team believe interim leader Alex Rowley deliberately tried to undermine him at First Minister’s Questions by accusing Nicola Sturgeon’s government of siding with “the millionaires rather than the millions” on tax decisions.

Sturgeon replied it was “unfair” of Rowley to “personalise this debate by bringing Anas Sarwar into it”.

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Bookies Ladbrokes now have Leonard at 8-13 with his rival a less likely 5-4 shot. An SNP spokeswoman said: “Anas Sarwar seems to be buckling under pressure after a week of confusion and disastrous interviews. It ‘s been an amateurish campaign.

“Mr Sarwar is correct when he says the Labour leadership candidates should be debating policy issues.

“But given that both men seem to be spending the campaign talking about themselves or obsessing over the SNP, it is clear that neither of them have any policy ideas to debate.”

At a hustings in Kirkcaldy on Friday night, the pair set out their cases to Labour Party members for becoming the next Scottish leader.

Interim leader Alex Rowley with Kezie Dugdale (Image: PA)

Sarwar said he had stood “side by side” with Labour colleagues despite facing death threats from right-wing extremists.

He said: “There are some who want to question whether I belong in the Labour Party and I want to be clear about this. The Labour Party have cradled my family, nurtured my family and given them opportunity.

“The Labour Party have given my family the opportunity to share that success with others. I have stood side by side with Labour comrades and friends in the face of racism, fascism, Islamophobia and death threats from the Scottish Defence League.

“I have stood on the frontline in a referendum campaign where people question our Labour values. I have stood in the frontline in the face of Tory and SNP austerity.

“I want to lead this Labour family, not for leading’s sake, but because I believe it needs to be in government because it is the greatest movement of change our country has ever seen.”

It is understood that Sarwar has also received a threat that his children would be kidnapped.

Sarwar criticised Leonard for ignoring the party whip in a Holyrood vote against Theresa May’s decision to trigger EU exit negotiations.

Leonard said afterwards: “I believed in sticking to the decision made by the people in the referendum. I didn’t think it was the place of me as an elected politician to block or attempt to stymie that decision.”

The Tories insisted yesterday that Leonard had an “extreme far-left record” as trade union leader and MSP. They said he backed a parliamentary motion praising Cuban leader Fidel Castro following his death and boycotted Better Together because he did not want to work with the Tories.

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Tory MSP Miles Briggs said: “After another chaotic week in Scottish Labour, it’s clear Richard Leonard is frontrunner to become their leader. That should worry ordinary Scots.

“Whether it’s backing the despotic far-left regime in Venezuela or refusing to work with others to keep our UK together, Leonard has shown time and again he is not interested in their concerns. Far from representing the many, he has consistently sided with the extreme few.”

He added: “Scottish Conservatives will be working hard to show we represent the modern mainstream in Scotland – building a strong economy that works for everyone.”

But a spokesman for Leonard said: “The party who departed the mainstream in Scotland are the Tory party, imposing austerity and cuts that have damaged public services the Scottish people rely on.

“Tory attacks like these did not work on Jeremy Corbyn and they won’t work on Richard Leonard because people are hungry for real change.”